Wells Fargo has lost nearly $24 billion in market value since it began hunting for a new chief executive, a slide that has left the bank lagging its largest rivals while its board searches quietly for a leader.
The stock has fallen 8% since Tim Sloan stepped down as chief executive in late March 2019. Over the same stretch, JPMorgan Chase has risen 7% and Citigroup 2%, while Bank of America is down 1% and the broader bank index has slipped about 2%.
Sloan’s abrupt exit capped years of scandal for the San Francisco lender, which was rocked in 2016 when it fired roughly 5,000 employees for creating millions of fake accounts. The bank has since paid a string of penalties, including a $185 million assessment and a $1 billion federal fine.
Analysts say the leadership vacuum is itself the problem. Just 31% of analysts who cover the company recommend buying its shares, compared with a range of 49% to 90% for JPMorgan, Bank of America and Citigroup. Brian Kleinhanzl, an analyst at KBW, said it is hard to own the stock with no long-term strategy being articulated, and described the hunt as an “opaque process being driven by the board with management unable to communicate to investors.”
Interim CEO Allen Parker, the bank’s former general counsel, has said he is not directly involved in the search and does not know when it will end. Wells Fargo employs more people than any other U.S. bank, with almost 263,000 staff at the end of June.
Sources
- Wells Fargo's market value drops $24 billion during CEO search – Los Angeles Times
- Wells Fargo CEO Steps Down in Ongoing Financial Industry Drama
